Consider the financial implications of lengthy auto loans - Gazettextra
Kevin Flores has more than six years to pay off the loan on his new Nissan Frontier pickup. He accepted the extra costs that come with stretching out his loan payment term in order to make his monthly payments affordable. "The way I justified it is, in five or six years, when I'm making more money, I can make extra payments toward that and pay it off sooner," said Flores, a buyer at an engineering company. About 30 percent of all new vehicles financed in the first three months of the year were purchased with loans ranging from just over six to seven years, according to Experian Automotive. In the first quarter of this year, 16 percent of used-car purchases were financed with these longer-term loans. Low interest rates, longer manufacturer warranties and the increased durability of newer cars can help blunt the potential risks of a loan that may not be paid off for six or seven years. Even so, these loans also translate into higher interest payments over the life of the loan and can saddle buyers with other costs. Source: www.gazettextra.com
